2 The terms ‘negotiate’ and ‘purchase’ are interchangeable expressions: for a definition of negotiation, see Art 2, UCP 600, replacing Art 10 (b) (ii) of the UCP 500.
3 This is usually charged to the beneficiary’s account in that it will be deducted from the face amount of the credit.
4 This is expressly laid down in Art 7 (c), UCP 600.
5 The maturity date varies from credit to credit, depending on the terms of the credit in question. In some, the days are to be calculated from the date of the bill of lading; in others, the date is when the documents are received by the issuing bank from the nominated bank. In still other cases, especially where the credit is opened available with the issuing bank by deferred payment or acceptance of a time draft, with the nominated bank being authorized to negotiate a complying presentation under the credit, the relevant 360 days are calculated from the day when the issuing bank incurs its deferred payment undertaking or accepted the draft accompanying the presentation. The same applies mutatis mutandis if it is the nominated bank that incurs the deferred payment undertaking or accepts the draft as drawee under the credit.
7 I.e. as provided by the credit-opening agreement, to which both he and the issuing bank are parties.
8 cf. Art 9, UCP 600 which directs that if a bank is requested to advise a credit or amendment but does not wish to do so, it must so inform, without delay, the bank from which the credit or amendment has been received. No sanction is indicated for a bank that fails to comply with this provision. But the bank may be liable in tort in the event that its failure to act causes the issuing bank financial loss: see generally Ch 2.
9 Although viewed as agent, it deserves noting that it does not act in a fiduciary capacity as would be found to exist in a traditional contract of agency: see Map Marine Ltd v China Construction Bank Corp, 2009 WL 6019497 (NY Sup); Sound of Market Inc v Continental Bank International, 819 F 2d 384, 388 (3d Cir 1987).
10 If the terms of the credit are erroneously advised, the issuing bank is bound by them, but the advising bank would be liable for the error: discussed in Ch 2. Art 9 (c), UCP 600; Uniform Commercial Code Revised Article 5—Letters of Credit, §5–106 (a) and (b) (hereinafter Revised Article 5).
11 Southern Ocean Shipbuilding Co Pte Ltd v Deutsche Bank AG  SGHC 221,  3 SLR 686,  (HC, Singapore).
12 For an English authority on the point, see Chatenay v Brazilian Submarine Telegraph Co Ltd  1 QB 79, 82–83, Lord Esher M.R.
13 The Restatement (Second) of the Conflict of Laws, 1971.
15 Comprising Milonas, J.P., Ellerin, Rubin, and Mazarelli, JJ.
16 2005 WL 5959993 (NY Sup), judgment delivered in the Supreme Court, New York County, on 13 September 2005.
17 2005 WL 5959993 (NY Sup) (emphasis added).
18 Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), published in the Official Journal of the European Union, OJ 2008 L 177/6, ‘Rome I Regulation’. As noted in the introductory section to Part III, the instrument supersedes the EC Convention of the Law Applicable to Contractual Obligations 1980 (the Rome Convention) and applies in all the Member States of the EU to contracts made after 17 December 2009.
19 Dicey and Morris on the Conflict of Laws, 11th edn (London: Stevens & Sons, 1987), Rule 200.
20 Dicey and Morris on the Conflict of Laws, 11th edn (London: Stevens & Sons, 1987), esp the case law authorities cited to Rule 200.
21 This is to be contrasted with a confirming bank or a non-obligated negotiating bank which, in honouring such a presentation of documents, acts mainly in pursuit of its own business. The point is discussed more fully in the appropriate contexts later.
23 In the context of transferable credits, a special set of terminologies usually obtains: the letter of credit expressly denominated as transferable is the ‘original credit’ or ‘prime credit’; the beneficiary thereunder is termed the ‘first beneficiary’; a nominated bank that effects a transfer of the credit is the ‘transferring bank’, and may be advising paying bank; the party or parties to which the original credit is transferred is the ‘second beneficiary’; and a credit made available to the second beneficiary is regarded as a ‘transferred credit’. See Ch 1, section C (8).
24 Art 38 (j), UCP 600 expressly entitles the first beneficiary to indicate in his request for transfer ‘that honour or negotiation is to be effected to a second beneficiary at the place to which the credit [is] transferred’.
25 2005 WL 6229841 (NY Sup) (judgment delivered 20 October 2005), rev’d, 34 AD 3d 124 (2006), 820 NYS 2d 588 (2006).
26 2005 WL 6229841, at *6.
27 The interest was quite substantial, having been ordered to be calculated from about 6 September when the claimant confirming bank’s presentation ought to have been honoured to 19 September 2006, and from that day until the judgment was satisfied.
28 Vita Food Products Incorporated v Unus Shipping Co Ltd  AC 277, 291, Lord Wright (PC); R v International Trustee for the Protection of Bondholders  AC 501, 531.
29 These include the public policy of the forum, a mandatory provision of the lex fori or of the law the country of otherwise applicable law or of the place where the obligation arising out of the credit has to be or has been performed: see generally Vita Food Products Incorporated v Unus Shipping Co Ltd  AC 277, 291; Arts 3 (3), 9, and 21 of the Rome I Regulation.
30 The location of the issuing bank is its address indicated in the credit: section 5-116 (b), Revised Article 5.
31 As to the substance of the words in italics, see Official Comment 2, section 5-116 (b) of Revised Article 5.
32 1962 version, which did not include choice of law provisions.
33 The report is reproduced in (1990) 45 Bus Lawyer 1555 (hereinafter Report). See also James G Barnes and James E Byrne, ‘Revision of UCC Article 5’ (1994-95) 50 Bus Lawyer 1449.
34 Report, ibid, 1641–1643.
35 Uniform Commercial Code Article 4 deals with bank deposits and collections. By section 4-102 (2) (b), the ‘liability of a bank for action or inaction with respect to an item handled by it for purposes of presentment, payment or collection is governed by the law of the place where the bank is located’. Although ‘item’ is defined under section 4-104 (a) as ‘an instrument or a promise or order to pay money handled by a bank for collection of payment’, the word ‘item’ is regarded more broadly to mean ‘documents’ in Art 2 (b) of the Uniform Rules for Collections, 1995 Revision, ICC Publication No. 522: by Art 2 (a), collection means the handling by banks of documents in order to obtain payment from the payor or acceptance from a drawee; hence it may involve a collecting bank’s delivery of documents (items) against payment (D/P) or against acceptance (D/A). A ‘document’ is either a ‘financial document’ such as a bill of exchange or other similar instrument used for obtaining the payment of money; or a ‘commercial document’, including an invoice, insurance certificate, and transport documents (e.g. bills of lading and airway bills).
39 The Committee was appointed by the American Law Institute (ALI) and the National Conference of Commissioners on Uniform State Laws (NCCUSL), both of which subsequently approved Revised Article 5 in autumn 1995.
40 These are letters of credit issued in, and to be utilized by, the beneficiary in the United States.
41 The differences do not call for lengthy elaboration here: they are sufficiently detailed in such classics in the field as AG Guest (with specialist editors), Benjamin’s Sale of Goods, 7th edn (London: Sweet & Maxwell, 2006), Ch 22; John F Dolan, The Law of Letters of Credit: Commercial and Standby Credits, 4th edn (Austin, Tx: AS Pratt, 2007). See also the website of SITPRO Limited, now defunct. (Note that the body, Simpler Trade Procedures, set up in 1970 as the UK’s trade facilitating agency, closed down its office in September 2010 as a consequence of substantial cuts in government funding for certain programmes run by the Department of Business, Innovation and Skill, a government body which had been financing its operations). Remitting bank is referred to as ‘depository bank’ in section 4-105, Uniform Commercial Code Article 4.
42 The Task Force Report regarded the bank as analogous to the issuing bank.
43 The Task Force Report regarded the party as analogous to the confirming bank.
44 See section 4-203, Uniform Commercial Code Article 4.
45 Leading authorities include Calico Printers Association v Barclays Bank Ltd (1931) 36 Com Cas 71; New Zealand and Australia Land Co v Watson (1881) 7 QBD 374; Mackersy v Ramsays, Bonar & Co (1843) 9 C & F 818; Henry Prince v Oriental Bank Corp (1878) 3 App Cas 325.
46 This derives from the general rule that there is no privity of contract between principal and sub-agent: see AG Guest (with specialist editors), Benjamin’s Sale of Goods, 7th edn (London: Sweet & Maxwell, 2006), para 22-092. However, in Bastone & Firminger Ltd v Nasima Enterprises (Nigeria) Ltd  CLC 1902, 1908, Rix J. suggested, obiter, that the Uniform Rules for Collections, 1978 edition, ICC Publication No. 322, appeared to have affected the orthodox common law position regarding absence of privity of contract between a collecting bank as sub-agent and seller as principal, since under Art 3 of the Rules both of those persons, as well as the remitting bank and drawee, are described as ‘parties to a collection’. Rix J.’s view is hard to support because, although by Art 3 the principal (seller) is liable to indemnify the banks against all obligations and responsibilities imposed by foreign laws or usages, Art 23 makes it clear that the collecting bank is only entitled to look to the remitting bank for reimbursement, not directly to the principal. If any doubt remains, it is at least now authoritatively settled that URC 522 of 1995, which succeeded the 1978 version does not create privity of contract between the principal (seller) and his sub-agent, the collecting bank: see Grosvenor Casinos Ltd v National Bank of Abu Dhabi  EWHC 511 (Comm.),  2 Lloyd’s Rep 1, para 157, Flaux J.
47 That a confirmer, when performing its obligations as such, is not an agent of the issuer is discussed more fully later in this section.
48 The cases were only inconsistent with each other with regard to the law governing the issuing bank’s obligations to the beneficiary or a nominated negotiating bank under an unconfirmed credit: for a discussion of the relevant American decisions, see Ch 10.
49 For cases affirming that the law of the confirming bank’s location governs its right to reimbursement from the issuing bank, see Bank of Cochin Ltd v Manufacturers Hanover Trust Co, 612 F Supp 1533, 1542 (DCNY 1985), aff’d, 808 F 2d 209 (2d Cir 1986); Chuidian v Philippine National Bank, 976 F 2d 561 (9th Cir 1992), aff’g 734 F Supp 415 (CD Cal 1990); World Point Trading Pte Ltd v Credito Italiano, 22 AD 2d 153 (1996). Regarding the latter suggestion made in the text, see Canadian Imperial Bank of Commerce v Pamukbank TAS, 166 Misc 2d 647 (1994), a case in which the credit was issued by a Thai bank, confirmed by a Canadian bank, and payment made by it in Canada to the beneficiary, a Canadian exporter. Since reimbursement by the Thai issuing bank was to be effected in New York, and not Canada, Gammerman J. in the New York County court held that New York governed the Canadian confirming bank’s rights under the credit.
50 Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd  EWCA Civ 422,  2 Lloyd’s Rep 72, paras 64–67; Habib Bank Ltd v Central Bank of Sudan  EWHC 1767 (Comm),  2 Lloyd’s Rep 412, paras 43–44 (Field J.); Bank of Credit & Commerce Hong Kong Ltd v Sonali Bank  1 Lloyd’s Rep 227, 237 (Cresswell J.); Bank of Baroda v Vysya Bank Ltd  2 Lloyd’s Rep 87, 92–93 (Mance J.); Union Bank of Switzerland v Indian Bank  3 SLR 371, 387; Mizuho Corporate Bank Ltd v Cho Hung Bank  SGHC 159,  4 SLR 67; Crédit Industriel et Commercial v China Merchants Bank  EWHC 973 (Comm),  2 All ER (Comm) 427, .
51 THD Struycken, Some Dutch Reflections on the Rome Convention, Art 4 (5),  LMCLQ 18.
52 Jonathan Hill, ‘Choice of Law in Contract under the Rome Convention: The Approach of the UK Courts’ (2004) 53 ICLQ 325, 341.
53 i.e., Art 4 of the Rome Convention; replaced, without affecting the point under discussion, by Art 4 (2) and (3) of Rome I Regulation.
54 Offshore International SA v Banco Central SA  3 All ER 749, 752, per Ackner J.
55 Bank of Baroda v Vysya Bank Ltd  2 Lloyd’s Rep 87, 93 (col 1).
56 See, e.g., Nicholas Creed, ‘The Governing Law of Letter of Credit Transactions’  Journal of International Banking Law 41, 43, proposing that the courts’ preference ‘leaves the issuing bank open to exactly the same dilemma: it may have an obligation to reimburse the confirming bank under the laws of the confirming bank, but no corresponding right to indemnification by its customer, the contract with whom may be subject to a blocking order of the laws of the issuing bank’.
57 Brian Davenport and Michael Smith, ‘The Governing Law of Letters of Credit Transactions’ (1994) 9 Butterworths Journal of International Banking & Finance Law 3, 5.
58 Noted in the introductory chapter to Part III.
59 The objective reasonable business person test has been consistently affirmed by the courts as the prevailing approach in determining the legal system or country with which a contract is most closely connected: see Pacific Recreation Pte Ltd v SY Technology Inc  SGCA 1,  2 SLR 491; Las Vegas Hilton Corporation v Khoo Teng Hock Sunny  SGHC 152,  1 SLR 341, para 44 [High Court, Singapore], citing with approval The Assunzione  P 150, 179 and Lord Wright giving the Privy Council advice in Mount Albert Borough Council v Australasian Temperance and Mutual Life Assurance Society Ltd  AC 224. See also The Njegos  P 90; The Adriatic  P 241; Dicey and Morris on the Conflict of Laws, 11th edn (London: Stevens & Sons, 1987), 1192.
61 The time of the contract is most probably when the confirming bank added its confirmation to the credit, as is the case with the issuing bank and beneficiary contract, which is created once the credit reaches the hands of the beneficiary. See generally Art 7 (b), UCP 600, briefly discussed earlier in Ch 2, section D.
62 As it occurred in the American case of Optopics Laboratories Corp v Savannah Bank of Nigeria Ltd, 816 F Supp 898 (SDNY 1993).
63 Mizuho Corporate Bank Ltd v Cho Hung Bank  SGHC 159,  4 SLR 67 (High Court, Singapore), para 7 (Tan Lee Meng J.): ‘Under English and Singapore law the governing law of [the] contract between an issuing bank and a confirming bank is, without more, that of the place where the confirming bank carries on its business’. As support for this rule, the judge cited the cases of European Asian Bank AG v Punjab & Sind Bank Ltd  2 Lloyd’s Rep 651 (CA, Eng) and Kredietbank NV v Sinotani Pacific Pte Ltd  3 SLR 288 (High Court, Singapore).
64 Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd  2 Lloyd’s Rep 72, para 67.
65 It is to be noted that an issuing bank’s obligation under a credit-opening agreement aimed at establishing a confirmed credit for the benefit of a designated party is to use its best endeavour to achieve that purpose. It is difficult to see how the issuing bank can claim to have discharged its best endeavour obligation when the failure to procure the confirmation of the credit was brought about by reason only that the issuing bank was unwilling to allow its relations with the potential confirming bank to be subject to the law proposed by the latter.
66 For discussion of the legal nature of a counter-guarantee, see generally Roy Goode, Guide to the ICC Uniform Rules for Demand Guarantees, ICC Publication No. 510 (1992). For a definition of a counter-guarantee, see Art 2 (c), Uniform Rules for Demand Guarantees (ICC Publication No. 758 of 2010), reproducing the corresponding provision in the earlier ICC Publication No. 458, 1992.
67  1 Lloyd’s Rep 132.
68  2 Lloyd’s Rep 411.
69 Today, the same conclusion would be reached under Art 3 (1), Rome I Regulation, which enables a court to regard as the applicable law of a contract the law ‘clearly demonstrated by the terms of the contract of the circumstances of the case’.
70  2 Lloyd’s Rep 411, 418–419.
71 Wahda Bank v Arab Bank Plc  1 Lloyd’s Rep 470.
72 Wahda Bank v Arab Bank Plc  1 Lloyd’s Rep 470, 473, col 1.
73 Wahda Bank v Arab Bank Plc  1 Lloyd’s Rep 470, 473–474.
74 Wahda Bank v Arab Bank Plc  1 Lloyd’s Rep 470, 474; Bank of Baroda v Vysya Bank Ltd  2 Lloyd’s Rep 87, 94 (col 1).
75 Minories Finance Ltd v Afribank Nigeria Ltd  1 Lloyd’s Rep 134, 141 (Longmore J.): ‘It is usually the case that ancillary contracts are treated as having their closest and most real connection with the system of law of the contract to which they are ancillary ... examples [include] bills of lading issued under charter-parties and guarantees to secure obligations’.
76  2 Lloyd’s Rep 87.
77 It provides: ‘When an issuing bank authorizes or requests another bank to confirm its irrevocable credit and the latter has added its confirmation, such confirmation constitutes a definite undertaking of such bank (the confirming bank), in addition to that of the issuing bank, provided that the stipulated documents are presented and that the terms and conditions of the credit are complied with’.
78 It provides: ‘By nominating a bank other than itself, or by allowing for negotiation by any bank, or by authorizing or requesting a bank to add its confirmation, the issuing bank authorizes such a bank to pay, accept or negotiate, as the case may be, against documents which appear on their face to be in accordance with the terms and conditions of the credit, and undertakes to reimburse such bank in accordance with the provisions of these articles’.
79 The credit in dispute was made subject to this edition of the UCP.
80 Bank of Baroda v Vysya Bank Ltd  2 Lloyd’s Rep 87, 90–91.
81 I.e. Arts 10 (b) and 11 (d), UCP 400, both of which are in substance equivalent to Art 7 (c), UCP 600, 2007 edition, which came into effect on 1 July 2007.
82 The error has in fact already caused confusion in the literature on the subject, as to which see notes 102 and 103, and accompanying text.
83 In substance, that by advising a credit or amendment, the advising bank signifies that it has satisfied itself as to the apparent authenticity of the credit or amendment and that its advice accurately reflects the information it received from the issuing bank.
85  1 WLR 642, 656 (col 1). A similar view had been expressed several years earlier in Maran Road v Austin Taylor  1 Lloyd’s Rep. 156, 161, per Ackner J.
86  1 Lloyd’s Rep. 275.
87  1 Lloyd’s Rep. 275, 280 (emphasis in original). However, the judge acknowledged for certain purposes the confirming bank may act for the issuing bank. This view was clearly put in perspective by the Singapore Court of Appeal in Credit Agricole Indosuez v Banque Nationale de Paris  2 SLR 1, 14, in stating that the confirming bank is an agent of an issuing bank for the ‘only’ purpose of confirming the credit and, one may add, transmitting the credit to the designated beneficiary; Chinsim Trading Pte Ltd v Indian Bank  SGHC 22,  SLR 144 at para 40: ‘It is settled law that a negotiating bank does not negotiate as an agent of an issuing bank’.
88  2 SLR 1. See also Chinsim Trading Pte Ltd v Indian Bank  SGHC 22,  SLR 144 at para 40: ‘It is settled law that a negotiating bank does not negotiate as an agent of an issuing bank’.
89 Credit Agricole Indosuez v Banque Nationale de Paris  2 SLR 1, 14. See also Southern Ocean Shipbuilding Co Pte Ltd v Deutsche Bank AG  SGHC 221,  3 SLR 686, paras 27–29.
90 Credit Agricole Indosuez v Banque Nationale de Paris  2 SLR 1, 13.
91 See e.g. Article 9, 1933 Revision (ICC Brochure No. 82); Article 5, 1951 Revision (Brochure 151); Articles 10 (d) and 14 (a), 1993 Revision (Publication No. 500); Arts 2 and 7 (c), 2007 Revision (ICC Publication No. 600).
92 In the particular context of the Rome Convention see Intercontainer Interfrigo SC (ICF) v Balkenende Oosthuizen BV (C-133/08) European Court of Justice)  QB 411, esp paras 33–37 and 64, The circumstances in which the general rule articulated in Article 4 (2) of the Convention may be disregarded pursuant to Article 4 (5) were the subject of a substantial body of case law and academic literature, including Samcrete Egypt Engineers and Contractors Sae v Land Rover Exports Ltd  EWCA Civ 2019,  CLC 533, para 41, where Potter L.J. in giving the judgment of the Court of Appeal explained that ‘To date, the high point of the jurisprudence justifying the decisive application of the presumption in all but the most exceptional of cases is Société Nouvelle des Papetieries de l’A v Machinefabriek BOA (1992) Nederlandse Jurisprudentie No. 750] in which the court stated: “it follows both from the wording and structure of Art 4 ... that the exception in Article 4 (5) (now in substance Article 4 (3) of Rome I Regulation) has to be applied restrictively, to the effect that the main rule [i.e. Article 4 (2), now Article 4 (2) of Rome I Regulation] should be disregarded only if, in the special circumstances of the case, the place of business of the party who is to effect the characteristic performance has no real significance as a connecting factor”’. See also Iran Continental Shelf Oil Co v IRI International Corp  EWCA Civ 1024,  2 CLC 696, paras 77–82, per Clarke L.J.; Paul Lagarde, ‘The European Convention on the Law Applicable to Contractual Obligations: An Apologia’, (1981-1982) 22 Virginia Journal of Int’l Law 91, 97–98. For an illuminating discussion of the Dutch court decision in Société Nouvelle, see THD Strucyken  LMCLQ 18. cf. the approach taken by Hobhouse L.J. with the concurrence of Mummery and Evans L.JJ. in Credit Lyonnais v New Hampshire Insurance Co Ltd  CLC 909, 914,  2 Lloyd’s Rep 1, 5 (pointing out that the presumptions in Art 4 (2)–(4) were ‘very weak’).
93 It will be recalled that the other promisee is the non-obligated nominated bank.
96 The bank is normally in the locality of the beneficiary.
97 Shanghai Electric Group Co Ltd v PT Merak Energy Indonesia  SGHC 2,  2 SLR 329, holding that whether an applicant is entitled to the grant of an injunction restraining payment or a call for payment on an on-demand bond or not, is to be determined by reference to the law governing the bond. This decision applies mutatis mutandis to the situation mentioned in the text, since on-demand bonds are recognized by the courts to be analogous with letters of credit.
98 Hanil Bank v PT Bank Negara Indonesia (Persero), 1997 WL 411465 (SDNY); Banco de Vizcaya SA v First National Bank of Chicago, 514 F Supp 1280 (ND Ill 1981). Reference may also be made to Fleet National Bank NA v Liang Argentina SA, 4 Misc 3d 1025, 798 NYS 2d 344 (SDNY 2004).
99 Bank of Baroda v Vysya Bank Ltd  2 Lloyd’s Rep 87, 93 (col 2), rejecting the counsel’s submission that the performance which is characteristic of the contract between Vysya Bank (confirmer) and Bank of Baroda (issuing bank) is the latter’s obligation to reimburse the former.
100 Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd  2 Lloyd’s Rep 72, para 85: ‘[T]he right of the confirming bank to reimbursement by the issuing bank is merely consequential upon the payment made by the confirming bank under its contract with the beneficiary’. Similarly, Mance J.’s statement in Bank of Baroda runs: ‘The liability on the part of the issuing bank to reimburse or indemnify the confirming bank is consequential on the character of the contract [between the confirmer and issuer]; it does not itself characterize the contract’. As already argued, these dicta are founded upon the fallacious premise that a confirmer, in honouring a presentation, acts as agent of the issuer. However, their Lordships’ view would apply to an advising bank making a payment to the beneficiary on behalf of the issuer, because in this case the advising bank’s decision as to the conformity of the documents is binding on its principal, the issuer vis-à-vis the beneficiary: see South Ocean Shipbuilding Co Pte Ltd v Deutsche Bank AG  SGHC 221,  3 SLR 686, para 40, per Punch Coomaraswamy J.
101 See generally Ch 10, section B.
102 See e.g., Peter Ellinger and Dora Neo, The Law and Practice of Documentary Letters of Credit (London: Hart Publishing, 2010), 380; Lawrence Collins (with specialist editors), Dicey, Morris and Collins on the Conflict of Laws, 14th edn (London: Sweet & Maxwell, 2006), para 33-311; JJ Fawcett and JM Carruthers (eds), Cheshire, North & Fawcett’s Private International Law, 14th edn (London: Sweet & Maxwell, 2008), 713.
103 CGJ Morse, ‘Letters of Credit and the Rome Convention’  LMCLQ 560, 565, referring to Mance J.’s dictum, said: ‘This conclusion would appear to be correct, at least in the general sense that the characteristic performer is that of the confirming bank’.
104 Ali Malek and David Quest (eds), Jack: Documentary Credits, 4th edn (Haywards Heath, West Sussex, England: Tottel Publishing, 2009), paras 13.69–13.71.
105  2 Lloyd’s Rep 651.
106 The credit was in fact ambiguous as to whether negotiation was unrestricted (in which case EAB would be a promisee under the credit) or restricted to ABN (in which case EAB could not claim to be a promisee of the issuing bank’s undertaking). The ambiguity lay in a conflict between cll. 6 and 9. However, having regard to the circumstances involved the court held in a related litigation between the parties (reported European Asian Bank AG v Punjab & Sind Bank (N0 2)  1 WLR 642, esp 656 and 660–661) that the issuing bank ‘unequivocally represented’ to EAB that it was ‘entitled to act as negotiating bankers under the credit’.
107 The principles which an English or Singapore court applies in determining such an application for a stay on the ground of forum non convenience are summarized by Lord Robert Goff in Spiliada Maritime Corp v Cansulex Ltd  AC 460, 474–484; adopted in Singapore in Koh Kay Yew v Inno-Pacif Holdings Ltd  3 SLR 121, –, CA. See also PT Hutan Domas Raya v Yue Xiu Enterprises (Holdings) Ltd  1 SLR (R) 104, ; John Reginald Stott Kirkham v Trane US Inc  SGCA 32,  4 SLR 429, paras 33–36. Decisions previous to Spiliada and applied in the instant case, European Asian Bank, are MacShannon v Rockwave Glass Ltd  AC 795; Trendtex Trading Corp v Credit Suisse  3 All ER 721 (CA, Eng.).
108 European Asian Bank AG v Punjab & Sind Bank  2 Lloyd’s Rep 65, 656 (col 2).
109 European Asian Bank AG v Punjab & Sind Bank  2 Lloyd’s Rep 356.
110 European Asian Bank AG v Punjab & Sind Bank  2 Lloyd’s Rep 356, 368 (col 2).
111 See clauses 9 and 10 of the requirements of the credit as reproduced verbatim in the judgment of Stephenson L.J., European Asian Bank  2 Lloyd’s Rep 356, 358.
112 Cooperative Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank) v Bank of China  3 HKC 119 (High Court, Commercial Division, Hong Kong).
113 General Introduction to this work; they include Sirius International Ins Co v FAI General Ins Ltd  UKHL 54,  1 WLR 3251, 3257–3258; Investors Compensation Scheme Ltd v West Bromwich Building Society  1 WLR 896, 913, per Lord Hoffmann; Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd  AC 749, 771, per Lord Steyn; at 775, per Lord Hoffmann; Antaios Compania Naviera SA v Salen Rederierna AB  AC 191, 201, per Lord Diplock.
114 In practice letters of credit routinely included clauses conferring such a right on nominated banks, especially negotiating and confirming banks.
115 Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Regulation), published in the Official Journal of the European Communities, L 12/1, effective 1March 2002; Chailease Finance Corp v Credit Agricole Indosuez  1 Lloyd’s Rep 348 (CA, Eng).
116  I L Pr.(International Litigation Procedure) 411.
117 Unreported, but delivered on 9 December 1991.
118 In consequence, the courts declined jurisdiction over RBS’s right to be reimbursed under the credit.
119 This may have potentially wider implications in situations where the court is determining whether it should grant leave to the claimant negotiating bank to serve its claim form on the defendant issuing bank outside the jurisdiction under para 3.1 (7) of Practice Direction 6B, supplementing rule 6.36, Civil Procedure Rules 1999 as amended by the 51st Update, which took effect on 6 April 2010, and in Singapore under the equivalent provision of Order 11, r (1) (e), Rules of Court, 2006 Edition.
120 European Asian Bank AG v Punjab & Sind Bank  2 Lloyd’s Rep 651, 656 (col 2); Bank of Baroda v Vysya Bank Ltd  2 Lloyd’s Rep 87, 91 (col 2); Bank of Credit & Commerce Hong Kong Ltd v Sonali Bank  1 Lloyd’s Rep 227, 237 (col 2).
121 Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank) v Bank of China  3 HKC 119, 140 (High Court, Commercial Division, Hong Kong).
122  1 Lloyd’s Rep 227, 237 (col 2).
123 The cases include Habib Bank Ltd v Central Bank of Sudan  EWHC 1767 (Comm),  2 Lloyd’s Rep 412 (credit expressed payable in London, but denominated in American dollars); Mizuho Corporate Bank Ltd v Cho Hung Bank  SGHC 159,  4 SLR 67 (credit opened in South Korea and denominated in US dollars, whereas payment is to be made in Singapore); Kredietbank NV v Sinotani Pacific Pte Ltd  3 SLR 288 (same credit as Mizuho, except that it was issued by a Chinese bank); Credit Industriel et Commercial v China Merchants Bank  EWHC 973 (Comm),  2 All ER (Comm) 427 (reimbursement under the credit was in France, where the negotiating bank was located, whereas the credit emanated from China in US dollars).
124 J Zeevi & Sons Ltd v Grindlays Bank (Uganda) Ltd, 37 NY 2d 220 esp 226 (1975), discussed and applied in Banco de Vizcaya SA v First National Bank of Chicago, 514 F Supp 1280 (1981), in Canadian Imperial Bank of Commerce v Pamukbank TAS, 166 Misc 2d 647 (1994), and in Cantrade Privatbank AG Zurich v Bangkok Bank, 256 AD 2d 11 (1998).
126 37 NY 2d 220 (1975), 226.
127 English courts have no jurisdiction under Part 72 of the CPR 1998 to make a garnishee or third party debt order against a debt situated abroad: see Société Eram Shipping Co Ltd v Cie International de Navigation  1 AC 260, where many of the relevant cases are discussed and applied by the House of Lords. The same is of course true of an American court: see Fidelity Partners Inc v Philippine Export and Foreign Loan Guarantee Corp, 921 F Supp 1113 esp 1120-21; Wells Fargo Asia Ltd v Citibank NA, 936 F 2d 723 (2d Cir 1991); Intercontinental Credit v Roth, 152 Misc 2d 751 (SCNYC 1990): ‘A New York court cannot attach property not within its jurisdiction’.
128 Princess Paley Olga v Weisz  1 KB 718; Bank Voor Handel en Scheepvaart v Slatford  2 All ER 779.
129 Deutsche Bank v Banque des Marchands (1931) 158 LT 364 (CA); R v Lovitt  AC 212, 219. See especially Re Helbert Wagg & Co Ltd  1 Ch 323, 342–344, where Upjohn J. reviewed some of the decisions on point; Jabbour v Custodian of Israeli Absentee Property  1 WLR 139, 145.
130 New York Life Insurance Co v Public Trustee  2 Ch 101, 114, in his concurring judgment.
131 Attorney-General v Bouwens, (1838) 4 M & W 171, 150 ER 1390; Toronto General Trust Corp v R  AC 679, 684.
132 But in all events, as a matter of procedure, the debtor can be sued in any of his several residences. The important thing to note, however, is that if an action is filed against him in a jurisdiction other than that in which the debt is located, the action would be for a breach of contract in neglecting to pay the debt at the location in which payment is promised, with the amount of the debt claimed as damages. On the other hand, if litigation is raised in the locality of the debt, the action is for debt: see New York Life Insurance Co v Public Trustee  2 Ch 101, 116; Helbert Wagg & Co Ltd  1 Ch 323, 342, per Upjohn J.
133 Jabbour v Custodian of Israeli Absentee Property  1 WLR 139, 140.
134  2 Lloyd’s Rep. 394 (Lord Denning M.R. and Griffiths L.J., Waterhouse J. dissenting).
135 For the same proposition made in reliance on the Power Curber case, cited in the text: JJ Fawcett and JM Carruthers (eds), Cheshire, North & Fawcett’s Private International Law, 14th edn (London: Sweet & Maxwell, 2008), 1226.
136 Dicey and Morris on the Conflict of Laws, 11th edn (London: Sweet & Maxwell, 1987), 909; 12th edn, 1993 at 928; 13th edn, 2000 at para 22-033; Dicey, Morris and Collins on the Conflict of Laws, 14th edn, 2006 at para 22-033.
137 Order 45 rules 8 and 9, Rules of Court, Cap 322, R 5, Laws of Singapore, 2006 edition. The provisions of the Order regulate garnishee proceedings, especially the grounds for granting garnishee orders, and mirror those established by the Rules of Court of the various Commonwealth countries. They are essentially in the same form as they were originally articulated under Order 45 rules 8 and 9 of the Rules of Court scheduled to the Supreme Court of Judicature Act 1875, and later in 1883 by the Rules of the Supreme Court.
138 Part 72 of the Civil Procedure Rules 1998 (CPR 1998) came into effect on 25 March 2002 and replaces Order 49, which had in turn in 1965 superseded Order 45 without significant modification.
139 It is to be noted that Upjohn J.’s view in Re Helbert Wagg & Co Ltd  1 Ch 323, 339, that a debt which is not due for payment has no situs does not represent the law to the extent that it is inconsistent with the pronouncements in the House of Lords in Arab Bank Ltd v Barclays Bank  AC 495, 528, per Lord Morton; at 532–533, per Lord Reid; at 535–536, per Lord Tucker; at 539–541, per Lord Cohen. The existence of a debt does not depend on there being a present right to sue for it; a debt immediately due has much a situs as one which is payable in the future: see Arab Bank v Barclays Bank  AC 495; Atkin L.J. in Joachimson v Swiss Bank Corp.  3 KB 110, 131; Schering Ltd v Stockholms Enkilda Bank Aktiebolag  AC 219. cf. Dicey, Morris and Collins on the Conflict of Laws, 14th edn, 2006 at para 22-028.
140 Under the Bills of Exchange Act 1882 as construed by the courts, an acceptance contract is made at the place where the acceptor’s communication of his acceptance reached the drawer’s hands: s 21 (2); or where he delivered the accepted bill to him: s 21 (1). With regard to judicial pronouncements on point, see Nova (Jersey) Knit Ltd v Kammgarn  1 Lloyd’s Rep 463 (HL) at 467, per Lord Wilberforce, at 478, per Lord Russell; Hooghly Mills Co Ltd v Seltron Pte Ltd  SGHC 272,  1 SLR 773, esp at paras 12–15 (High Court, Singapore), holding that the law of that country governs the acceptance contract.